Selling Pressure Pulls Nifty Lower

Indian equity markets on today slipped on the back of broadly negative global cues and heavy selling pressure witnessed in IT, banking and Tech (technology, media and entertainment) stocks.

Besides, sector-specific selling pressure, especially in Idea Cellular’s stocks which plunged by almost ten per cent following major merger announcements in the telecom space, hampered investors’ risk-taking appetite.

The key indices closed the first day of the trading week in the red as investors were unwilling to chase prices higher and took to book profits.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) fell by 33.20 points or 0.36 per cent to 9,126.85 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 29,653.54 points, closed at 29,518.74 points — down 130.25 points or 0.44 per cent from the previous close at 29,648.99 points.

The Sensex touched a high of 29,699.48 points and a low of 29,482.40 points during the intra-day trade.

The BSE market breadth was marginally bearish — with 1,488 declines and 1,307 advances.

In contrast, the broader markets outperformed the benchmark indices. The S&P BSE mid-cap index was up by 0.17 per cent, while the small-cap index rose by 0.30 per cent.

Last week, the equity markets closed with marginal gains and the benchmark NSE Nifty hit another record intra-day high, crossing the psychologically significant 9,200-mark for the first time.

“Markets began the week on a negative note as the Nifty ended lower due to profit taking. Idea Cellular stock remained volatile after the announcement of its merger with Vodafone was made official,” Deepak Jasani, Head – Retail Research, HDFC Securities, said.

“Major Asian markets have ended on a mixed note. European indices like FTSE 100, DAX and CAC 40 traded lower.”

However, on the currency front, the Indian rupee continued to strengthen on the back of a weak overseas dollar. It strengthened by nine paise to 65.37 against a US dollar from its previous close of 65.46 to a greenback.

Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services said: “IT stocks continued to bleed, with a firm rupee adding to H1-B visa woes. Risk appetite was also on a lower note, as markets entered an event vacuum, and investors looking for bargain, rather than chasing price higher, with stocks already at heady highs.”

In terms of investments, provisional data with exchanges showed that FIIs purchased stocks worth Rs 56.67 crore, whereas the domestic institutional investors (DIIs) divested scrip worth Rs 536.21 crore.

On the sector-specific movement, Dhruv Desai, Director and Chief Operating Officer of Tradebulls, said: “IT sector stocks traded with bearish sentiments due to profit booking, while banking, media-entertainment, power and cement sector stocks traded with mixed sentiments.”

“Pharma, auto, oil-gas and textile sector stocks traded with firm sentiments due to buying support,” Desai noted.

“Aviation and telecom sector stocks traded with sideways to bearish sentiments.”

Sector-wise, the S&P IT index plunged by 144.45 points, followed by the banking index, which dipped by 100.84 points, and the Teck index, which fell by 72.29 points.

On the other hand, the S&P consumer durables index augmented by 150.13 points, the healthcare index rose by 68.32 points and the FMCG index was up 19.24 points.

Major Sensex gainers on today were: NTPC, up 0.87 per cent at Rs 161.50; HDFC Bank, up 0.81 per cent at Rs 1,437.50; Bharti Airtel, up 0.76 per cent at Rs 349.45; Coal India, up 0.76 per cent at Rs 291.95; and Lupin, up 0.62 per cent at Rs 1,462.55.

Major Sensex losers were: Axis Bank, down 2.41 per cent at Rs 504.55; ICICI Bank, down 1.99 per cent at Rs 275.15; Infosys, down 1.87 per cent at Rs 1,020.60; Tata Consultancy Services (TCS), down 1.82 per cent at Rs 2480.80; and Reliance Industries, down 1.56 per cent at Rs 1,280.35.

FIIs net buy Rs 56.67 Cr in equities and DIIs net sell  536.21 Cr in equities.

FII positions in Index puts, futures and calls.

Nifty Put Call Ratio (PCR) data shows support at 9100 and resistance at 9200

(With agency inputs)